>> gretchen: real estate guru bob massi tomorrow seminar from florida. register, rebuilding your dreams at foxnews.com. >> steve: bobby dean and maria in the after the show show. martha: sounding the alarm on america's spending problem. the non-partisan congressional budget office says we are in for a massive and unsustainable increasing deficit if we don't get a handle on entitlements. good morning. glad to have you with us.

gregg: the cbo is saying it deficit will go down to $840 billion. that's the first time it will drop a trillion dollars under president obama. martha: but with baby boomers retiring at the rate of 10,000 people a day. entitlement spending is set to explode. stuart, as we pointed out, there is a lot of enthusiasm that we won't rack up a trillion dollar deficit. >> reporter: the headline was all about the deficit is going to be below a trillion dollars. that's great news. the bad news and there is a lot of it. the next 10 years medicare will

cost $1 trillion a year. obama-care subsidies will total nearly a trillion dollars. the cost of medicaid will double and the debt will go to the highest portion of tour economy than it's been in a generation. there is dismal views on the current state of the economy. 1.4% growth this year and the unemployment rate will rise at 8% and stay that way for years to come. martha: the cbo makes very clear we need to do some entitlement work and recraft these programs if we want them to be our for our children. why does the administration not appear to be too concerned about doing that. >> reporter: you have to ask, is deficit reduction a priority

of the obama pad min straition? it doesn't seem like it. just yesterday the president was trying to avoid the big spending cuts. he's trying to avoid that. there is a faction within the democrat party that says debt doesn't matter, we have beaten it. whether that's true or not. deficit reduction is not a priority. martha: the president believes the economy is getting back on track. so let the folks decide. stuart, thank you very much. gregg: according to the cbo. by the end of the year the federal debt held by the american people will be 76% of the gdp and it doesn't get much better from there. martha: the cbo also predicting unemployment will be with us for

some time to come. here is the director of the cbo. >> under current law we expect the unemployment rate will remain above 7.5%. that would make 2014 the 6th year in a row with unemployment so high. the longest such period in 70 years. martha: the unemployment rate has been above 7% since december of 2008. and most recent monthly number ticked up from 7.9% from 7.8%. not a good trend. when you look at some of these numbers it makes it a tough argument for economic recovery. but the president remains convinced we are starting to see it. gregg: poverty is up. incomes are down. so the arrow is going the wrong way. in the meantime president obama

is asking republicans to delay spending cuts with more tax hikes. there are some liberal democrats who say republicans just want to gut the social programs. >> it's time we take off just the green eye shade and look at the people behind the cuts that have been made. $600 million cuts to community health centers. that's talking about taking food out of the mouths of babies. i would say mitch mcconnell is a bully. gregg: will republicans go for president obama's deal? martha: there are some tough new questions for the white house after a memo surfaced that lays

out the case for targeting u.s. citizens overseas when they believe they are a threat to our country. the critics say it allows the president to be the judge, jury and executioner on americans. now there is a group of senators who say they want answers to this, and if they don't get them the president's nominee for cia and defense could be held up. >> we conduct those strikes because they are necessary to mitigate ongoing actual threats, prevent attacks and save american lives. these strikes are legal, ethical and wise. the u.s. government takes great care in deciding to pursue an al qaeda terrorist, to insure precision and prevent loss of american lives. gregg: peter doocy joins us in

washington. >> the first thing an american citizen has to do to be targeted is associate themselves with al qaeda operations. when they do that the juts is department says that out weighs their right to due process. >> we say that we only take these kinds of actions when there is an imminent threat when capture is not feasible and when we are confident we are doing so in a way that's consistent with federal and international law. >> reporter: a secret justice department memo makes sure there does not have to be a known plot, just an imminent threat to target a citizen aligned with al qaeda. the first to be targeted was anwar al-awlaki. we heard republicans and

democrats come out in the last 24 hours and say they don't think decisions about executing u.s. citizens should be made secretly. >> you have a senior unaccountable d.o.j. official that makes the determination recent activities makes him believe we are in imminent threat and you can send a drone to kill him. i'm troubled any time government is as non-transparent as this. >> reporter: tomorrow john brennan will come to capitol hill for the senate confirmation hearing. he was president obama's number one counter official terrorism official as the drone protocols grew. we expect to hear u.s. senators bring that up at his confirmation hearing.

gregg: the question being asked today, what if president bush had done this? some say he would have been raked over the coals big time for his. martha: the city of charlottesville, virginia is the first city to pass resolutions related to drones. originally they tried to make me charlottesville a completely drone-free zone. it's a big issue in this country. gregg: we are learning new details about the end of that hostage standoff in alabama. authorities say accused killer jimmy lee dykes rigged his bunker with explosive and even

planting a bomb device in a ventilation pipe that he told negotiators to use to communicate with him. the feds continue to scour dykes' property for more evidence. meanwhile, relative say the child appears to be doing quite well. his mother released a statement. ethan is safe and back in my arms and i owe it all to some of the most compassionate people on earth. i'll never be able to repay those who helped bring ethan home. my family and i ask that you respect our privacy and give us time to heal and time to put this nightmare behind us, time to move forward. martha: thank goodness that worked out the way it did. there was a spoim warning that was can -- there was a tsunami warning canceled overseas because a magnitude 8.0

earthquake struck in the solomon island. it triggered a series of relatively small waves. they are located in the so-called ring of fire which has the most volcanic activity in the world. gregg: it looks beautiful, but how would you like to live in a ring of fire. martha: the tsunami alert has been thwarted. some new problems for lance armstrong. reports that there is a new investigation that could lead to some serious charges for him. gregg: criminal charges. forecasters from predicting a blockbuster storm. the question is, is it head your way? martha: new allegations of crony capitalism as a big donor and

friend the the white house just received a massive contract to give high-end smartphones to the unemployed. but does the program work? remember this from the last election. >> everybody in cleveland got phones. he gave us a phone. you sign up, you got no income, you get disability. hey, our salads. [ bop ] [ bop ] [ bop ] you can do that all you want, i don't like v8 juice. [ male announcer ] how about v8 v-fusion. a full serving of vegetables, a full serving of fruit. but what you taste is the fruit. so even you... could've had a v8.

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24/7 monitoring against burglary, fire, and high levels of carbon monoxide starting at just over $1 a day. now our best offer has been extended due to popular demand. installation starting at just $49 -- a savings of $250. adt. always there. gregg: police in texas release the chilling 911 call that led them to the sniper. the sister made the call after her brother reportedly confessed to murder. >> my brother just came by here.

he told me that he committed a murder. and i'm terrified for my life. i don't know if he's going to come back here. gregg: ralph is a 25 year old iraq veteran being held on murder charges. martha: cell phone company tracphone will be giving out free phones with internet service to help low-income job seekers find work. bu the first time the president has given a business deal to one of his so-called cronies. it was a practice he promised to get rid of it. >> the days for sweetheart deals for halliburton will be over when i'm in the white house.

martha: jonah goldberg joins us. you know, i think that these kind of deals have happened over and over and over again. but the difference is that president obama made it very clear in the election he wanted nothing to do with this kind of thing. now you have a good friend of his, the ceo of tracfone is a frequent visitor to the white house and they have got a pretty good deal out of this one. >> president obama said no more sweetheart deals for halliburton. he didn't say no more sweet hurt deals for tracfone. it's a pilot program. this program which i think is constitutionally dubious to begin with. the fcc should not have the power to raise taxes by itself.

but under this program it's supposed to be for under privileged poor people and unemployed people to learn typing skills and write resumes and they will hand out smartphones which i think is not great for typing out resumes. martha: the program supporters say it's a way for the unemployed to learn technical skills to prepare their resumes and search for jobs. but one of the pilot projects went to this tracfone wireless company that president obama is closed to based on their visits to the white house. whether these programs even work, i think everybody would say great. if it gets people jobs and it's truly helpful you could make some good argument for that. but it doesn't appear it does.

>> i'm not shire would be entirely in favor of these giveaways if you can prove they work. why are we turning libraries to train people with if the whole idea is to stay on the couch and play with their smartphones and play doodle jump. my friend and muck raker tim carney says whenever the government gets involved in a new business the well-connected always win. this is a classic example of this. this company owned by a mexican mobile giant 'tise 'tis of -- advertises incredibly aggressively saying do you want a free phone. if this program takes off the company is set to take in $100 million a month from reimbursements from the government. martha: it raises questions about a growing entitlement

society as well. the gifts from the government is a way to keep people unempowerred. >> this goes to obama's core philosophy which we heard in the second inaugural and nancy pelosi who called unemployment a jobs bill. positive liberty is when the government gives you stuff that lets you be all you can be. that's what obama talked about in the second inaugural. he said all these programs liberate people to be entrepreneurial. my suspicions if you give them free this, free that. it doesn't make them entrepreneurs but it makes them dependent on the government. martha: thank you, jonah. always good to see you. he's a poet and doesn't know it.

gregg: another day of dramatic testimony expected in the ex-girlfriend murder trial. she changed her story over and over again about her former boyfriend's death and her latest version of events. save her from the death penalty. >> we talked about it and basically our relationship was over and it was kind of sad. eat good fats.

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martha: she suffered a terrible crash. word now that olympic ski champion lindsey vonn is out for the rest of the season. sheer to ligaments in her right knee and suffered a broken bone. it's a slow motion replay of

what happened yesterday. what a tumble for lindsey vonn who is such a great ski champion. the hope is she'll be back on the slopes. this an optimistic hope. for october in the world cup she says she is grateful for the outpouring of support and looks forward to competing as quickly as possible. she hopes to be in tune for the sochi olympics. she has a year to rebuild. gregg: her story has changed. more dramatic testimony in the case of jodi arias reportedly after he ended their relationship. her appearance is now different from when she was dating alexander. but it isn't just her looks that have changed.

her story has changed. during an early police interrogation she denied killing him. about a month later she claimed he was here he would back up that zwroir. september 2008 her account changes when she claims she witnessed two other masked people killing alexander and this week on the witness stand she admitted she killed alexander but claims it's self-defense. adam, she was on the witness stand all day again yesterday. and she said a lot of things about her relationship with travis. what did we learn? >> reporter: the defense team is methodically going through just about every relationship she had since high school trying to show her as level headed even when she claims one past boyfriend tried to choke her. and some difficult times growing up in her household.

the defense is trying to paint her as someone able to handle it. then they started talking about travis alexander's relationship with jodi trying to show that he was someone controlling. take a listen to this snippet from court. >> mr. alexander motivated you to break up? >> it was about my life and career and direction of my life. it made me step back and take a look at where i stood and where i was going. >> reporter: there was graphic testimony talking about the relationship. the theory is as they move through today she'll start to show him as more controlling and someone who beat her. gregg: her appearance is strikingly different from her earlier life.

there she is on the left-hand side. do we have any indication how much longer the defense is going to go on direct examination? the real fireworks will be cross-examination. >> reporter: everybody is waiting for cross-examination. we expect the defense to rest today. that is the theory. they are very methodical in the way they are laying this out, trying to portray her as being this calm individual. they have three or four major holes in their story. they say that, hey, if you are going to skill somebody, why would you split them from rear to rear, and drag the body around the house. everybody is waiting for that to happen and that could begin midday today. gregg: prosecutors love these

types of cross-examinations with a witness. >> reporter: so do court observers. martha: a showdown over spending cuts that are weeks away. the president says he needs more time to come up with a budget. republicans say time is up. kevin mccarthy joins us in america's newsroom. gregg: he has taken a beating in the court of puck opinion but lance armstrong could soon find himself in a real criminal court facing prison time. we'll tell you the new charges he could be facing. [ male announcer ] it's a rule of nature.

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gregg: a new report that cyclist lance armstrong is the target of a federal investigation. it comes just weeks after arm strong admitted to oprah in a televised interview that he did in fact use performance enhancing drugs during his career and he had been lying all along. a former federal prosecutor joins us in the studio. let's put up the entire laundry list. it's pretty scary. drug trafficking, money

laundering, fraud, conspiracy, obstruction of justice for trying to bully and intimidate witnesses into lying. and perjury. under oath in a civil case he lied. >> absolutely. gregg: will the fed prosecute him? >> you have to look at the history. there was a case in california that was hastily dropped. some of the agents in the case were saying they were surprised and they thought it was a viable prosecution. they recommended an indictment. not appears either another district or main justice in washington is looking into it. i would not be surprised to see some type of case. gregg: isn't this why we tell our client shut up, don't talk to anybody but me. >> always public relations ... he thinks he will do to great public relations move and

legally it's an absolute disaster. first of all he received a settlement for libel from a british tabloid. gregg: martha and i were talking a moment ago, she doesn't think he will go to prison. i would point to marion jones in a track start. she went to prison for lying about drug use. >> if you look at the steroid situation in baseball i think marion jones might be the outlier. but we don't have crystal balls. gregg were barrie bond might have gone to prison if he had not gone to prison on the substantial charges. put up on the screen the potential civil lawsuit. this federal whistleblower case pending accusing him of

defrauding the government of $30 million. libel reimbursement case to the sudden daytime. recovery of $12 million in bonuses for the fraudulent tour de france wins. then sponsoring lawsuits to recoup millions paid which nike and others. in the end he could have to fork over almost his entire $100 million fortune? >> yes and no. i don't think there are times when the athletes give back their actual compensation. a baseball player used steroids. they may be subject to legal machinations, but not necessarily salary. the people he defamed by saying how dare you claim i did this. there will be a lot of lawsuits and big time with the sponsor money. but not necessarily --

>> what about the people he bullied? he ruined their lives. and their careers. >> he took such a scorched earth offensive allout thing that by the way he also created tremendous bad will which i think will come back to get him. gregg: good to see you as always. thanks so much. martha: the boy scouts of america are expected to soon vote on whether they will allow gay scout members for the first time in their history. that decision could come today. here is the group headquarters in irving, texas. why are the boy scouts considering this move now? >> reporter: they have not addressed that. they refused to go on camera leading up to this answering any questions. but there are several theories floating around about that. one of them is primarily

financial. keep in mind the boy scouts of america have lost hundreds of thousands of dollars in corporate sponsorships because of its anti-gay stance. intel and united parcel service have pulled their funding and there is a decline in membership. the organization claims 2.7 youth members and 1 million adult volunteers. the number of young people involved in scouting plunged 20% since 2000. and many simply say it is an outdated discriminatory policy. >> the leading cause of death for gay kids is suicide because they feel deep feelings of rejection from organizations like the boy scouts of america and individuals in our society that reject that. >> reporter: even president obama said gays should have the same access and opportunities as everyone else in society.

martha: not everyone is on board with this change, are they, casey? >> reporter: no, they are not. groups like save our scouting and the family research council have had a lot to say about this. the family research council said it does not want role models for children to be heterosexual foreigheterosex sexualfornicato. >> they want to change their principles we are definitely going to consider removing our boys from the program. unfortunately because i really love the program. >> reporter: if this ban is lifted it would not require the chartered organizations to allow gay members. it would change the language and national policy and allow

scouting units to decide for themselves. we do not know when the decision will come. the boy scouts have not told us. but we are on top of it, martha. martha: it will be interesting when they do make that decision. casey stegall. gregg: the problems that could bankrupt a major city that the super bowl will not erase. martha: the postal service made a major announcement about your mail service that you need to know. [♪]

gregg: new dash cam video capturing a horrific accident. take a look at this.

that just came out of nowhere. it was reported by a driver in south korea. the people inside the car are all lucky to be alive. no word on what caused the suv too jump over the median. martha: wonder why they had a dash cam on the front of that car. it makes you want to be sure your seat belt is buckled. those people are okay. new reaction from house republicans after president obama asked for a short-term budget plan to avoid what the pentagon called devastating defense cuts known as the sequester. the white house is offering a tradeoff including spending cuts and more taxes. eric cantor says that deal will not fly. >> absolutely not. it's just more of the same. we have got a real problem in

this country we know. we are spending much more money than we have to the tune of a trillion plus dollars a year and it's got to stop. it doesn't help people for to us keep doing that. martha: good morning, congressman. good to have you with us today. what do you think about that? the president its asking for more time. a lot of people i think at home listen to that and say this will be the second extension we have had on this which was supposed to be a make or break push before the end of the year. >> the whole idea of sequestration was the president's idea. the house passed last year twice a way to find the cuts with protecting the military and the senate and the president ignored it. that does not solve the problem. this president is just coming back to his same answer. to take more money from the taxpayers. that is not the answer. we need to get government under

control and expand this economy. martha: the thinking is on the fiscal cliff deal you didn't have that much leverage. this time around you do. charles krauthammer was on special report with bret baier and said they need to do nothing. republicans should sit on their hand in this one. are you going to do that? >> we are not doing nothing sitting back because we have passed a bill that would find the cuts to make it go forward. but we are moving forward to produce a budget that balances and grows the economy. where the president for the last five times has missed the deadline. we had to threaten the senate to do a budget. haven't done one in the last four years. and it's sad that the last two weeks we have to spend our time on one of the most basic things to get them to answer. martha: the president said

yesterday they have cut 2.5 trillion in defend city reduction. all the thing that were on the table when he tried to make a deal with john boehner are still there. entitlement reform, tax reform is still on the table. come to the white house. try to hammer out a deal based on that framework. why not? >> do you know how many times he's been to the white house and he pulls the football out from under you. this president never comes to an agreement. of all the budgets the president sent to this capital it has not received one vote from a republican or democrat. this president has increased spending and put deficits in the trillion dollars every single year. you can't continue that. the cbo director warned yesterday that the amount of debt to the gdp is in dire straits. we have to do something about it. martha: what many your next

move? >> put a budget that reforms government. expand the economy and lets us grow. that's something we passed. this is sequestration the president asked for. it's going through march 1. he requested it. he ignored it. the house has acted. martha: you will allow sequestration to kick in on march 1. >> this is what the president asked for. martha: he says he's willing to do entitlement reform. why would you be reluctant to do means testing or raise the age for those of us under 55 and have a ways to go before we get to that point. why do you think he doesn't want to get together with republicans on that idea that seems to get a lot of general support. >> the president has never campaigned for it and he always fought against it in the time it came forth. that's the challenge when he

says come negotiate with us. i think what needs to happen. the house passed a budget. the senate needs to pass a judge the and let many start working from there. show where the path will be where you can make fiscal responsibility here and bring accountability back to washington. martha: you are saying sequestration would kick in. the senate says they are going to put out a budget. it's been over three years. always good to have you with us today. the majority whip, california congressman, kevin mccarthy. thank you, sir. gregg: some dangerous weather heading toward some of the biggest cities in the northeast. what can we expect from this latest winter blast? we'll have a live update from the fox news extreme weather center.

gregg: extreme weather is headed toward the northeast. the area could be hit by a so-called weather blockbuster this weekend. how extreme is this one? >> reporter: a lot of people have been asking for snow across the northeast. we still have time to go so it's only wednesday and we are expecting the storm later in the day friday and early saturday morning. everyone around the northeast just needs to be made aware. there is a storm that could be coming to wrap up the workweek and. the big story will be the wind and the possibility of significant snowfall.

especially across eastern portions of new england. this is one of our computer models. this computer model has kept the storm track focused to the coast. so that means a greater chance of heavy snowstorm parts of new england, and strong winds. and this model also keeps a stronger storm system. so this will be critical as to how much snow we'll be seeing and where. the area right now that does seem to have a higher confidence seeing a foot of snow will be massachusetts, vermont, new hampshire and southern areas across the state of main. there is another computer model that keeps the storm weaker. it keeps a rain event across the atlantic. d.c., you could be seeing a wintry mix as we head into friday and early saturday morning as well. and very strong winds with this storm system. a classic nor'easter. southern areas in vermont, new

hampshire and maine. we are expecting 6 inches of snow. but the possibility for more snow does exist and we'll continue to see watches and warnings as we head into today and tomorrow as the storm system continues to tomorrow. just a foul snow showers in the northeast. nothing too significant. the two areas of low pressure that will merge. one is across texas. the other across the make northwest. a possible north easter friday and saturday. gregg: let's hope we don't have any power outages. some people are still suffering. you are passing the white stuff on. martha: i like snow, not power outages. let's talk about the story brewing this week. there were details leaked on president obama's drone strike policy that some say make him the judge, jury and executioner in these cases.

it's raising a lot of questions about presidential power and the constitution. is it in line with what he publicly said about the fight against terror and how would people respond if another president had done the same thing? gregg: we are minutes away from a big announcement by the u.s. postal service. that's a live look in washington, d.c. why mail delivery as we know it could be changed forever. [♪] ♪ ♪ if loving you is wrong ♪ i don't wanna be right [ record scratch ] what?! it's not bad for you. it just tastes that way. [ female announcer ] honey nut cheerios cereal -- heart-healthy, whole grain oats. you can't go wrong loving it.

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martha: sifl rights groups are calling the president a hypocrite for backing a policy of targeting american citizens overseas when they have not been charged with a crime. >> i would point you to the amplamample judicial precedence.

that's established in a number of cases. i'm not even a lawyer and i'm aware of that. >> fox news national security analyst. morning kt. >> good morning. martha: i'm tkpwegs you don't have a problem with that drone policy in and much itself, right? >> if this had been the bush administration we'd be talking impeachment now. in the bush administration what happened, necessity water boarded three admitted self-indicted criminals who were part of september 11th. that was something that was called great human cry. now we have american citizens being killed. i have no problem with anybody being killed who makes war in my country. we are doing it in an open-ended way. this is the same guy, john brennan was at the c irk a during the waterboarding day, the enhanced interrogation and he's the mastermind of the drone wars and the new cia director. martha: what do you think it tells us about the obama

administration's policy towards the war on terror? >> i think a couple of things. they don't want to get their fingers dirty. they don't want american casualties. known wants that. the problem i think is three in the whole drone war idea, number one we may have been very good at the very beginning when we were taking out key people in very difficult to reach parts of pakistan and afghanistan but we've now expanded that drone war and are the third thing martha that worries me probably more than anything we are lowering the threshold of when we use force. it's an important thing to have americans in the loop. by doing something where no

americans are at risk. martha: it negates your ability to get intelligence from any of these individuals. >> yeah, they are dead. martha: we know the president is not fond of the gitmo model. it raises a lot of questions about the most useful way to apprehend people and get information from them. as far as we know, right we are talking about anwar al-awlaki, and american-born citizen who we know was an inspiration to the fort hood shooter and the time square bomber and underwear pwo*erpl, most americans would think that was a pretty legitimate case built there and two others connected to them. we are are not talking about any other instances that we know of. >> against american citizens. there are an awful lot against the taliban. we are the only guise with drones now. that will not last forever. what happens when other count

there's get drones? do they takeout an american ambassador driving a car in saudi arabia? you could even see drone attacks in the united states. i worry about the precedent, the generation that we're creating of people who are really going to hate america and i worry about loring the bar so we make it much too easy to pull that trigger and go to war when we don't have anything at risk. martha: we basically had heard that the war on terror was over in many ways, and yet it has been carried on in a way that may perpetuate it if you're right. kt thank you so much for being with us. always great to talk to you. >> thanks. gregg: we are just getting word of a shooting in ben srer denver, colorado now. several people including children have been killed or injured. we just don't know yet. there is a heavy police presence at a home in denver, and witnesses say they saw a child

being brought out on a stretch tore a waiting ambulance. now police are saying in a tweet that there are multiple victims but we don't have any further details. as soon as we get them we'll pass them on to you. hate to be a buzz kill but here it is, the city of pwoupl, the ravens cannobaltimore, a new report showing that the city is on the path to ruin. they will accumulate $75 million in budget deficits, factor in retiree healthcare cost, struck struck needs th struck. the total shortfall $2 billion. charlie gasparino joins us. charlie there have been 41

bankruptcies by municipalities, a lot of them were mismanagement. in one case it was a huge legal judgment. what happened in baltimore? >> we should point out that they are not bankrupt yet. they phase like a similar dilemma as the united states in a certain respect. in the future there is going -- there is a point where you can't borrow any more, your expenditures are much higher than your revenues, and then you are in the muck so to speak, you are in bankruptcy. obviously if they take steps to prevent it over the next couple of years they could prevent that. $2billion is not a huge amount of money. it sounds like a lot of money but think about it, warren buffett is worth $40 billion, they can get their arms around this. here is the problem that baltimore faces and a lo facebook.commess and a lot of big government. they raise taxes at the blink of an eye. they don't deal with the pentagons and health benefits

they give workers. the necessary steps that need to be taken aren't taken until it's too late. when you think about what happened with new york city, they had years of that and then you had the 1975 fiscal crisis, and you had to take draconian steps, massive cuts, it was years before the city got back on its feet. they had a technical default at the time on some of their debt. in some ways new york city is still paying higher interest rates because of that thing in 75. that's what pwoupl has to do. baltimore has to do. do they have the political will to do that? i doubt that. gregg: you have a revenue problem. >> you have the problem of middle class people working out because of lousy schools, and high crime. do what rudy guiliani today and ed koch did, you deal with crime and start restoring confidence in the business sector of the city. new york city is a much let's place now than it was in the 70s and early 80s.

the reason why was because rudy guiliani, and ed koch to took the time to deal with the fiscal problems with the city, and remember taxes aren't the answers. when you raise taxes on working class people, middle class people property taxes they run. if you don't deal with crime middle last people leave. businesses don't want to stay. that region of the country, that sort of washington region is the era of the country that is doing very well right now. baltimore should benefit somewhat from that. gregg: when you come in on a train in baltimore it's scary. >> very scary. gregg: enough said g. to see you. martha: karl rove is firing back at some of his critics after claims that he is favoring establishment republicans over tea party candidate. rove says that is not so. he says he is looking nor wins, winning candidates and results. take a look at this from last night. >> some people think the best we can do is todd akin and richard

murdoch, they are wrong. we need to to better if we hope to take over the united states senate. we need to get more conservative candidates and win. martha: who better to talk about that but to carlson and alan colmes. gregg: the president said if you like your hilt insurance you can get to keep it. not so fast. details on how wrong he might have been. martha: stunning video of four volcanoes all erupting at the sale time. it looks like the beginning of earth. it's unbelievable. wait until you see all this. we'll be right back.

gregg: a deadly scene in fort lauderdale, florida, one person was killed when this truck slammed into a pillar halfway

off the overpass. rescue crews working for hours to remove the driver, eventually had to use a crane to pull the truck off the ramp. the accident backing up rush-hour traffic in both directions. martha: interesting conversation going on here, and karl rove is now responding to critics after coming under fire for his new political action committee. several conservatives have claimed that rove is supporting main-stream republicans over tea party candidates but rove came out fighting on this last night with shaun and a tee. he says what he wants is to get the best republicans elected. take a look.

>> there is an awful lot of tension between the grassroots and the establishment in the republican party. the grassroots believe the establishment is ideologically corrupt, they don't really mean it, and the establishment things the gas roots is crazy and are putting up mediocre candidates. the bottom line is not whether you're conservative or hreu or liberal. if you can't, for example, attack abortion without appearing into dores rape yo endorse rape. it's not a question of who is conservative and who is liberal it's a question of who is articulate. martha: what karl was saying last night is his group supported tea party candidates, they supported candidates considered conservative candidate, he this is this whole thing about him shoeing the tea party for the establishment is

bunk. >> i think he's got a really good point. they did support an awful lot of conservative candidates. the republican party for a bunch of different reasons apparently isn't strong enough to weed out the poor candidates in the primary. groups like karls fills the boyd. somebody has to be a gate keeper keeping morons away. if you can't speak english you're not going to win election. martha: alan loves when morans runs for office it makes him very happy. >> i want conservatives who can't win. i want conservatives to make comments like god intended if women get raped that the baby should be born. martha: we don't want to hear that one again. >> just to pick up on what tucker said, tucker and i probably agree that carl is saying, he clearly said we want the most conservative candidate who can within, that makes a lot of sense. it's being pragmatic. martha: that is what is known as the william f. buckley rule to

root for the conservative who has the best chance of winning and who is the most conservative. where do you think this goes from here, tucker, this conversation? does it get republicans to a better place where they do win more electio elections? because that's clearly what they want. >> there is still a lot to shake out here. no one says it out loud or rarely. an awful lot of conservatives, the republican primary election threat believes they were sold down the river, not in all ways, they are upset about the prescription drug benefit, the lack of fiscal restraint, there is this battle going on mostly behind the scenes between the people basically in charge of the partly and the people who are actually coming out to vote. and i think this will not be settled until there is a broad consensus among republicans on what they stand for. what does it mean to be a republican? what do you believe when you're a republican? martha: it seems like that message, we heard it from tkpo*fz bon mcdonald, from eric

cant torques the message alan -- i think in many case democrats have been able to successfully demon mice republicans as being out of touch and not caring about the best outcome for the country on a whole. >> i don't think republicans need any help from democrats to be demon niced. look what happened to mitt romney he had to twist himself into a petition zell to try to appeal to a constituency, try to be something he really wasn't. we never knew what he stood for e. was trying to be whatever he thought the republican party needed to win. martha: which is always a mistake. i honestly believe that both sides really do want the best for the country, they just have very different ways about how you get there. one side believes that the government is the best route to helping people and the other side believes that people on their own sroe hreurgs the best. >> i don't think they always think government is the best way

to help people we. have a benign view of government than conservatives. and think government can be a force for good. i wouldn't generally state government is always the answer. martha: final thought and we have to go. >> just to be totally clear, fielding candidates who can make the case, it's not the same as fielding liberal candidates. you can field strong, ideological conservatives and still win. they just have to be able to talk. martha: very low bar. thank you, tucker. tucker carlson, alan colmes, sue he guys next week. gregg: the muslim cleric behind the planned mosque at ground zero is now in a whole bunch of trouble. why he is accused of taking donations and stic sticking them in his own pocket. martha: the results are in the great american board game getting a new token this morning. we'll tell you which one of these little fellas will be in your next monopoly box.

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jo a big change come being for the great american board game and it has finally been revealed. i know you've been thinking about this all morning i. was tweeting about it before. monopoly fans voted to lose the iron. remember the iron? it was always the last piece that nobody wanted, right? now it's going to be the cat. the toymaker, hasbr aorbgo let fans decide. they have sold more than 275 million games worldwide. in the fourth quarter of 2011 the sales were flat. they say the fans from more than

120 countries cast their votes. i like the guitar better. do we have all the choices? there was a guitar, what else is there. gregg: the dog. martha: the new version, the robot, helicopter, guitar, diamond ring which is always popular with sroebgs. with folks. the scotty dog. gregg: i knew there was a dog. bombshell developments concerning the founder and former head of the ground zero mosque, a former donor slapping the imam with a $20 million lawsuit accusing him of taking millions in donations and spending money on pricey trips and sports car and other personal expenses to tell you about. eric san antonio is here ieric shawn is here. what do we know about this? >> reporter: he was the imam behind the ground zero possible

being and is accused of absconding with millions of dollars for his own use. he once said the u.s. was, quote, an accessory to 9/11. he allegedly diverted charity donations intended for islamic causes to line his own pocket, that at least according to a lawsuit filed by businessman and tphrapb tr robert leslie deek and his family. they siphoned off donations that were intended for a separate islamic education program. the money went to him and his wife, daisy kahn. she gained notoriety for the mosque around the corner from ground zero. the money went to a luxury sports car. personal real estate. laugh sreulavish trips. they say they are shocked that they have been preyed upon and

they accuse him of taking more than $3 million from the maylasian government and allegedly falsifying the tax returns from his nonprofit groups to they say hide the money, gregg. gregg: what do they say. >> reporter: they deny the allegations. paul knight says, quote the lawsuit is merit less and will be vigorously defended in the new york court. it turns out there may be a lot more to this or something else than it people's because h it seems because i and his wife are suing the deeks in washington. that 16-story islamic center has not been built and its future remains uncertain, gregg. gregg: thanks very much. martha: if you like your current health plan the president promised that you would be able to keep it. but a new report shows that 7 million people are finding that is actually just not so. we're going to explain. gregg: check this out, four volcanoes erupting at the very

same time, incredible videotape coming up. ♪ [singing] ♪ ♪ [ indistinct shouting ] ♪ [ indistinct shouting ] [ male announcer ] time and sales data. split-second stats. [ indistinct shouting ] ♪ it's so close to the options floor... [ indistinct shouting, bell dinging ] ...you'll bust your brain box. ♪ all onhinkorswim from td ameritrade. ♪

martha: breaking news. it looks like there is no decision from the boy scouts on

whether or not they will allow gay scouts in their organization. we thought we were going to get some decision on this at some point today but we are now learning that they are still deliberating and that they think more discussion is necessary. no decision today from the boy scouts on whether or not they will change their policy as a national organization to allow gay boy scouts. we'll see. gregg: troubling developments from a brand-new report on healthcare. despite president obama's pledge when he pushed for his healthcare overhaul, if you like your coverage, you may be among the 7 million americans not able to keep it now. this coming from the nonpartisan congressional budget office. that number is nearly twice their previous estimate. matt mccall president of penn financial group joins us live. matt, explain why 7 people americans will lose their job based health insurance? >> well from the corporation standpoint that is supplying

these employees with their health insurance it is actually cheaper for them to take the penalty. what happens is the government will impose a penalty on your employer for not offering you insurance. as an employee you then go into the exchange which the government will put together. the big problem i see with this. gregg is the fact that a lot ofs exchanges according to the ceo themselves will not be able to handle this influx of people coming in, so you're going to have a mess on your hands when you have 7 million people looking for health insurance. gregg: when the president was pushing for obamacare and he doesn't mind that -- he's sort of proud of that now. here is what he promised, take a listen. >> if you're one of the more than 250 million americans who already have health insurance you will keep your health insurance. this law will only make it more secure and more affordable. gregg: we now know it's not true, 7 million are going to lose it. was that a promise that really never made sense? >> there is no way he could have

made that promise. the way that obamacare is set up, it forces employers not to offer the same type of insurance that they offered in the past. not only that, these exchanges, he knew people were going to go on to these exchanges. and the health insurance offered on the exchanges is not the same as they had in the past. in his mind, yes, maybe in a perfect world that would have happened but realistically it never would have been the case, gregg. gregg: we just learned that the gdp in america is negative, late last week, unemployment went up so it's going in the wrong direction. we know that poverty is rising, income levels are dropping, and unemployment, according to the cbo report that just came out said hey it's going to stay at around 8%, and they call the deficit unsustainable, and yet the president stood there yesterday and, you know, he said we are experiencing a recovery. he claimed the economy is recovering. do the facts belie that. >> no if you look at numbers it

just does not add up. you look at some of the things that cbo put out as far as unemployment remaining high. and growth estimates are somewhat laughable thinking that our economy is going to grow upwards of 3.5% in the next fl three years. we had negative growth last quarter. as bad as they look they are based on pretty robust growth numbers. if we don't meet those numbers it gets worse. $1.6trillion it's going to cost us over the next nine years for obamacare. gregg: sure. very quickly i'm almost out of time. the president is now talking about on the heels of tax rate hikes, and tax hikes, more tax revenues. what would that do to the competent? there is a few ways we can get out of this. obviously increase revenues, another one is reduce spending. clearly the president does not want to reduce spending that is not in his vocabulary.

the only way to inch sraoes revenuincrease revenue is to increase taxes. if they increase what happens, they lay people o. it hurts an economy that is already in negative territory. gregg: it can have a deterrent on the economy. matt mccall good to tee you. martha: the medicaid expansion part of the healthcare overhaul is causing concern for dozens of states. the federal government is offering funding to states who agree to expand their medicaid coverage. not every state is willing to participate in this plan. william la jeunesse joins us live from los angeles to explain. >> reporter: martha if i gave you a dollar would you give me a dime? of course, you'd be crazy not to, right? many people think a dozen governors are fools for doing just that, turning down millions for the relative price of a penny to pay for medicaid expansion which expands subsidized medical care for

families earning up to 130% over the federal poverty guidelines. 32,000 dollars for a family of tpoufrplof for. so, the 15 states that you see here are likely to turn down washington's promise to pay up to 90% of the cost of that expansion, 11 states are undecided and 24 plan to take the money. >> with this move we will secure a federal revenue stream to cover the cost of the uninch churneuninsured who already show up in our doctors office and emergency rooms. >> reporter: governor brewer offers that if she doesn't take the money other states will, meaning her residents would subsidize the medical care of other states poor even though it runs against her philosophical grade. martha: what about the states that are turning the money down? what do they say?

>> reporter: they call this a about it and switch. here is the carrot, 100 100% tpupbzing, once you're hooked it's 90%, two years from that it goes lower and lore. a dozen republican governors say we can't afford the 10%. >> people say it's free federal money. that is our tax dollars, your tax dollars and my tax dollars, so don't pull that game on me. secondly it's 90-10. that 10% is the part i'm concerned about as a state. >> reporter: the cost of social programs are typically a shared, federal state funding formula but the percentages do change. special education started out at 40% federal money now it's 20% so it's fears are not unphonedded. it's a controversy in the states because the hospitals are saying this is uncompensated care, we want a piece of the federal action and the states say we want to spend this money on

education, maybe not healthcare for the poor. martha: it sound like the burden gets shifted to the state so they have to factor that in in deciding whether they will take the ten cents on your dollar. thank you. we'll see you soon. gregg: awaiting a news conference with republican leader john boehner expected to weigh in on the fight over a looming deficit defense budget cuts, pardon me. can washington reach a deal to stop cuts described as dangerous to our national security. martha: have you watched this case, dramatic new testimony in the trial of a young woman accused of a brutal murder of her x boyfriend. what she is now saying about the very first time they met. >> i thought he was going somewhere, because like he had purpose, so i stepped out of the way, he needed to walk past me, but he stopped right in front of me and stuck his handout and introduced himself.

martha: fox news alert. there is a whole loft hacking going on out thereof computer systems. remember the story about the "wall street journal" and "the new york times." now we are learning and this has been confirmed by fox business network that the federal reserve was also hacked. they are saying they are aware that information was obtained by exploiting a temporary vulnerability on their website in a vendor product. they say they fixed it quickly and it did not affect any critical operations of the federal reserve system but you have to wonder what people are testing in terms of the vulnerabilities. an interesting story it sounds like they have got it under control. we'll be watching for more on that. the federal reserve. gregg: we are expecting more dramatic testimony today in the ex-girlfriend murder trial jodi arias scheduled to return to the witness stand, continuing to layout the events that led to the brutal murder of her ex-boyfriend, travis alexander. here she is describing how the

two got together. >> he was friendlier and friendlier but not inappropriate, but after i learned that he already knew i had a boyfriend and he continued to act that way i thought it would be -- i thought i needed to pull him aside and tell him that i have a boyfriend so that he didn't get the wrong impression. gregg: lis wiehl is a attorney and knocks news analyst. and monica is w. i want to ask you what is going on here, so much testimony about what she claims to be a life of physical and emotional abuse that she suffered. she is not claiming diminished capacity or in sanity but nevertheless is this to lay the groundwork for a sort of mental defense connected to self-defense? >> absolutely. see we already know that the defense is going to have experts come onto talk about battered women, and the abuse, and what she feels like, or what this caused her to be like, so she

needs to lay the groundwork of her life, and her history, and the abuse that she suffered in her life, and why she stayed with someone who was so sexually aggressive, or who abused her. without her laying this groundwork the experts won't be able to testify about why they came to the opinion that we'll probably hear next week. gregg: liz i bet you the defense is trying to get a jury instruction that is a subjective self-defense jury instruction that is, did the defendant given her history of alleged mental and emotional abuse reasonably believe that her life was in eupl manslaughter danger of death and that's why she acted. if they get that jury instruction, what then? >> the key is you said imminent threat of death. really she has given no indication of that. she's taken the stand and talked about the sexual relationship between them, to many of us it's a very odd relationship. but it was consensual, gregg, all along the way she said it

was consensual. she talked about the abuse in her family in the past. i've read a lot of reports and people that i prosecuted and then criminal reports afterwards, everyone has been abused at some level. i have to say the level that she's been talking about is not that high a level, gregg, not to get that instruction. gregg: monica what about the so-called imperfect self-defense, a honest but mistaken belief that your life is in imminent danger because of all of the alleged physical and mental abuse over the years and so forth, you just mistakingly misunderstood the circumstances. >> well, i don't think that is going to go very far in this case, because in arizona she has to show that he is the one that was the abuser to her and that he was threatened -- threatening her with imminent physical force and deadly force. if she can't show that, if she can't show that history with him she will not be able to use that self-defense justification at all. i don't even think just a mistake will even get the instruction in, because she need

to give more evidence, and they haven't really put anything out there yet with him. gregg: imperfect self-defense did not work nor eric and lyle menendez so they tried. what we'll see coming up is cross-examination by the prosecution. because she told so many different lies leading up to her surprise testimony of self-defense they are just going to have a field day on cross-x. >> they'll go through every single story she told, to the media, cops, everything. the first story was i wasn't there, i wasn't even at the scene i don't know what you're talking about. they'll have that, blow that up, make sure the jurors see that, take a lot of time to go through that. came in.ory it was two masked they'll particular a lot of time going through that story and now she is claiming self-defense. then they'll go through the injuries, gregg, 27 stab wound, slitting the throat and then a firearm through the forehead. gregg: that could go in the defendant's favor because in

closing arguments the defense attorney is going to say only a traumatized and abused person would lash out with such extreme violence like that. >> absolutely. and you know it only takes one juror to agree with her, to feel sorry for her to like her, which is one of the reasons why she's going on and on and on about all the details in her life, because she wants to draw that jury in, get a like interest, a like experience, something for a juror to relate to her, so when they get to that part they can say, but we know why she did this. she only need one to agree with her. >> there is no support for the claim she's making about the abuse with this guy. >> i agree. gregg: i think they are trying to save her life from the death penalty. >> that's what is on the table. >> monica lindstrom who was inside the courtroom and we wi lis wiehl thank you both. jon: have you heard about the cbo report suggesting the u.s. is headed for a dangerous place

if we do not get our spending under control? this as the president meets with senate democrats. so what is the plan on the debt? we'll get into that. plus, the post office saying goodbye to some mail delivery on saturdays, but do they even have that authority? gregg was just talking about the jo tkeurbgs ariadi arias trial. the woman accused of stabbing her boyfriend 27 times back on the stand today. we'll update you on what the prosecution wants to know. a new research station in antarctica open for business. we'll give you a peak "happening now." martha: we'll see you then 11:00 at the top of the hour. you are about to witness mother nature's furry in a way you have never seen before. look at this. unbelievable video. four volcanoes simultaneously erupting at the same time. guess where this is happening, and how photographers were able to capture this video. we'll show you in a minute.

♪ fire. ♪ fire. ♪ fire

martha: this is so cool, mother nature putting on a fiery show like you've never seen before i. know i've never seen this before. a team of photographers capturing an incredible display in eastern russia. four dol volcanoes they found erupting at the same time just over a hundred miles apart. they used a special camera and created an amazing virtual volcano tour. corey powell editor of a magazine joins us. this is not the one that i created in fourth grade.

what are we seeing here? >> this is probably the most volcanic area on earth, in siberia. three crust ta crustal plates are crushing together, and where they slide you get a frenzy. there are 150 dormant ones. nobody has seen anything like this. four different volcanoes with four eruptions happening at the same time, unprecedented. martha: it's a great story about the photographers and how they basically stumbled on it. >> i new there were storm chasers, these guys were volcano chases. they were on their way to a photo chute in due by. the dubai. they hired a helicopter pilot and had him take them there where they were walking over hot lava to get these shots. martha: it's almost as if when you look at this you're seeing

what that might have looked like. >> this is where the continents came from. this is new earth being born. martha: as you point out the reason that it's happening in this spot, is the tectonic plates, right, merging and nashing against each other. how quickly is that process happening? >> north america and russia, like it or not we are moving closer together. it's about two inches a year, the rate your fingernails grow. that little bit of motion is enough that the rocks scrape together that creates incredible heat and friction and that is the result. it's the same thing that caused the tsunami in japan and what they call the ring of fire, it's volcanic activity all around the ring of the pacific, that's where the earth is kind of living and breathing. martha: that's where we saw that earthquake in the sol louisiana monesalomon islands. >> going there and studying she's things where it's erupting all the time tells ahh lot about

how to predict risks in some place like mount rainier in the united states, which is dangerous but we don't know how dangerous, you go there and find out. martha: at the rate your fingernails grow how soon before russia and the united states are kissing cousin neighbors. >> we have thousands of neighbors. we have plenty of time. martha: thanks, corey, always a pleasure. good to have you here. >> wonderful, what an amazing story. martha: it is a great story. gregg: when your boots are smoking it's time to leave. the president's pick for c.i.a. director facing fierce resistance on both sides of the aisle, serious questions hanging over the head of john brennan just 24 hours away from the senate hearing that could decide his professional fate. this is so sick!

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